Idaho Medicaid provides health care services, including prescription drugs, to low-income Idahoans. By law, Idaho Medicaid must reimburse pharmacies and hospitals at the “estimated acquisition cost” of the drug. Idaho Medicaid primarily uses “average wholesale prices,” as reported by drug manufacturers, as a basis for determining this amount.

Attorney General Wasden’s settlement with Boehringer Ingelheim Pharmaceuticals, Inc., Boehringer Ingelheim Roxane, Inc., and Ben Venue Laboratories, Inc., has been approved by the Fourth District Court in Ada County. The companies admitted no liability or wrongdoing.

If the manufacturer reports an inflated or false average wholesale price for a drug, taxpayers can pay too much for that drug through Medicaid reimbursements. For example, in 2003, Boehringer Ingelheim Roxane, Inc., published an average wholesale price of $1.311 for a package of Azathioprine. The Attorney General believes that a true average wholesale price was $ 0.314. Thus, a pharmacy that dispensed this drug to a Medicaid patient in 2003 could have paid $0.314 for the drug. However, Medicaid would have reimbursed the pharmacy using Roxane’s published average wholesale price of $1.311 as a basis for its reimbursement decision.

“Investigation by my office has revealed that the reported average wholesale price often is not related to the actual wholesale price paid for the drug and that reporting of inflated wholesale prices by drug manufacturers is prevalent in the industry,” Attorney General Wasden said.

Since 2006, Wasden has resolved four average wholesale price cases with drug manufacturers, resulting in more than $3.6 million recovered for Idaho taxpayers. Three average wholesale price cases, naming 30 other drug manufacturers, are still pending.